Opinionista Sikonathi Mantshantsha 29 July 2019

Nationalisation is not the answer to the land question; land is far too valuable to be owned by the state

How do you solve the land problem? Not through nationalisation, not through a land tax, but through a capable state that places at the top of its priorities a fair redistribution of property, starting with the distribution of its own land holdings.

The debate about the nationalisation of property should never have been allowed to happen in the first place.

Smart people had, and still have, no reason to even discuss the possibility of depriving people of the ownership of assets they have legally and justly earned. People with any sense of justice may not deprive those who have legally succeeded in creating and growing wealth for themselves. Such a discussion, among smart people, was never going to be as lengthy as we have allowed it to be. By “land” or “property”, I include all economic assets, including shares in companies. Land is too valuable to be left in the care of the state.

Nationalisation would mean transferring ownership of assets to the state. Disaster. That which belongs to the state belongs to everybody. Thus it belongs to nobody. Look at Zimbabwe, where the state now owns all the land. Thus the majority owns the land.

But they have been reduced to guarding vehicles at shopping malls in South Africa and Botswana. Closer to home, look also to what was the Bantustan Republic of Transkei, where land ownership was vested in the state. Through traditional leadership structures, the people who live on the land own it. This communal land ownership model has not solved the problem of poverty and unemployment in the area. I should know, for I, a landed native of the Transkei, have been plying my trade far away from “home” for all my working life.

It is an indisputable fact of historical record that the black majority was violently dispossessed, at the barrel of the gun, by the European arrivals starting in 1652. The black Africans had themselves violently dispossessed those they had found on these shores, the indigenous Khoisan people. Those were the solutions of the time, around 400 years ago. The classical survival of the fittest. This column, however, is about finding the best possible way to restore economic justice and the fair ownership of material assets, to all those who have a claim to this country.

Instead of wasting time and expending scarce resources discussing how to dispossess those who inherited the land from the most successful group of invaders, modern South Africa should be discussing how best to fulfil the promise of 1955, which the mothers and fathers of the Freedom Charter had in mind when they declared that “South Africa belongs to all who live in it”. That promise can only be fulfilled when each and every citizen has a fair and reasonable opportunity to acquire the means of production.

The founding fathers of the 1994 settlement, which produced the constitution of the republic, had already laid a concrete foundation when they enshrined in the Constitution the inalienable right to ownership of property. They also asserted, correctly, that the state would facilitate the restoration of justice to the dispossessed through the acquisition of land for redistribution to the black majority.

What South Africa should have been discussing, immediately after the political settlement that extended democracy to all who live in this beautiful land we call home, was the restoration of economic justice and democratising the economic space. Coming shortly after the attainment of political justice, restoring economic justice to the broader population should have started by a concerted effort to restore land ownership to the dispossessed black majority.

Twenty-five years later, why are still grappling with this matter? The truth is that finding land to acquire at market rates was never a problem. To the extent that I can tell, there was never a point where the government did not have resources to acquire such property. What there was, was a lack of interest on the part of the state to deliver on this crucial project.

Those who ascended to power after 1994 busied themselves with other priorities, such as harvesting the bribes from the massive and unnecessary Arms Deal, and arguing for minority stakes in companies established by those with the means. Thus they condemned the dispossessed black majority to accept a minority role in the economy.

The land owned by the state, as a starting point, could have been used as the foundation to build something new, for the benefit of the majority. That is what the apartheid project did with its access to political power, starting in 1948 when it reserved all state resources for the benefit of its Afrikaner constituency and reinforced this with the Job Reservation Act and other measures designed to entrench the advantage of this constituency. Crucially, education — neither minority stakes in entities nor land — was the key enabler to secure a permanent advantage for the white empowerment project.

The strategic mistake on the side of those representing the majority was not to insist on levying a special land and property tax on those who were in possession of the assets.

Such a tax would not only have helped raise the cash to buy land for distribution to the landless majority, but it would also have helped to quickly identify the owners of the dormant land. The tax liability would incentivise the owners of a dormant property to release it to the market, to make it available to people who had a need to use the property productively. Of course, the single largest landowner is the government itself. The obvious benefit of a land tax would be to help reduce inequality. Transferring wealth from those who had, to those who did not.

So, what is to be done? Is it too late now to impose a land tax in order to pay for the redistribution of land to the majority?

Indeed it is too late now to impose such a tax to fund the acquisition of property for redistribution. For such tax would harm the very intended beneficiaries of the tax. The black middle classes, due to their numerical strength, own more property than any other group in South Africa. These assets have been accumulated through sweat and blood, albeit too slowly, over the past quarter-century of democracy.

It would be suicidal for this country to implement a policy of blanket nationalisation of property, be it land or shares. Life just does not work like that.

What South Africa needs is a capable state that places at the top of its priorities a fair redistribution of property and ownership regime. That begins by releasing the hundreds of thousands of hectares of land held by the government to the intended beneficiaries. Let a million black farmers bloom!

And once that is done, the state has to make sure the new owners enjoy all the protection and benefits such property rights deserve. That is how you sustainably build a proper middle class, which wants nothing less than a growing economy in which none may be unfairly dispossessed. In such a secure environment, a growing economy would generate more profit, more tax and thus more money to be redistributed to the poorest of society. BM

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